European shares gain on hopes of softer Brexit and US-China trade deal

European shares advanced on Wednesday as investors pinned their hopes on a soft Brexit and the US finally reaching a trade deal with China.

The pan-European Stoxx 600 index rose by 1 per cent to its highest level in nearly eight months, while the Iseq index in Dublin advanced 1.8 per cent to 6,313.12.

Dublin

Banking stocks were in strong demand in Dublin, as British prime minister Theresa May and Labour Party leader Jeremy Corbyn held discussions on breaking the Brexit deadlock.

“Theresa May’s decision to sit down for talks in a bid to find a solution to the Brexit impasse is potentially a big moment,” said Dermot O’Leary, an economist with Goodbody Stockbrokers.

AIB jumped 4.4 per cent to €4.42, while Permanent TSB added 4 per cent to €1.30 and Bank of Ireland, which is most directly exposed to the UK economy, moved 2.1 per cent higher to €5.61.

Smurfit Kappa was also in demand, advancing 4.2 per cent to €27.06, as reports that US and Chinese officials are getting closer to a trade deal potentially bodes well for the global economy. Both countries imposed tariffs on billions of dollars’ worth of each others’ goods last year.

CRH gained 3.5 per cent to €29.21 after German brokerage Berenberg started coverage with a buy rating and a price target of €33 on the stock.

London

In London, the FTSE 250 bounced 1.2 per cent – its biggest rise in 2½ – for a fifth straight session of gains, while the FTSE 100 added 0.4 per cent and ended the session at its highest level since early October. But the exporter-heavy FTSE 100 lagged its European peers as the pound firmed.

Although the default remained that Britain would leave the European Union without a deal, Mrs May’s move to enter talks

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